When Overseas Workers Are Australian Employees

The Fair Work Commission has determined that a Philippines based “independent contractor” was an employee unfairly dismissed by her Australian employer.

Like us, you are probably curious how a foreign national living in the Philippines, who had an ‘independent contractors’ agreement with an Australian company, could be classified as an Australian employee by the Fair Work Commission?

The recent case of Ms Joanna Pascua v Doessel Group Pty Ltd highlights just some of the issues Australian businesses face when working with overseas contractors and staff.

When it came to the clauses excluding matters such as the payment of income tax, workers compensation, annual and personal leave relied on by the legal firm as confirmation of an independent contractor arrangement, the FWC referred to the Deliveroo Australia Pty Ltd v Diego Franco case and others. That is, the FWC considers, “the statements in the contract about meeting the obligations consequent upon the labelling of the arrangement as one of independent contractor to have little weight in determining the true nature of the relationship.”

The new definition of employee and employer

In August 2024, a new definition of what is an employee and employer came into effect in the Fair Work Act. This new definition extends the High Court’s decision in CFMMEU v. Personnel Contracting Pty Ltd and ZG Operations Pty Ltd and Jamsek to rely on the nature of the contract between the parties, not just what the contract says. The intent of the legislative change appears to be to ensure that clever drafting of a contract alone will not be sufficient to define an independent contractor arrangement.

The Fair Work Act now requires that the true relationship between the parties is, “determined by ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person.” The totality of the relationship needs to be considered including how the contract is performed in practice.

What does this decision mean for employers?

The FWC’s decision in Ms Joanna Pascua v Doessel Group Pty Ltd highlights how cautious employers should be about the nature of employment relationships. Just because you label an arrangement as that of an independent contractor, does not mean it is. And if you get it wrong, beyond the industrial relations impact, you might be liable for the tax, payroll tax and workers compensation payments that should have been made.

What makes this decision unusual is how an international employment arrangement can be drawn into the national workplace system. Regardless of the geographic location of an employee, if your business is an Australian national system employer (bound by the Fair Work Act), and the individual is deemed to be an employee, the same rights and obligations may apply to that employee as to other employees located in Australia.

While not addressed in this case, the FWC also referred to the minimum wage for a paralegal performing work such as that undertaken by Ms Pascua. While not applicable to this case, from  1 January 2025, wage theft will become a criminal offence – where an employer is required to pay an amount to an employee but intentionally underpays.  For international employees where rates might be significantly different to Australian expectations, it is more important than ever to ensure you have characterised the employment relationship correctly.

Tax obligations and international workers

We’re often asked about the implications of working with overseas, non-resident workers who are working for a resident Australian company.

Let’s say you want to engage the services of a non-resident individual.

Do We Need Insurance?

Insurance is often overlooked or considered unnecessary by many Australians, yet it plays a crucial role in safeguarding financial futures.

Most Australians are underinsured, due to factors such as the complexity of insurance products, the perception that insurance is too expensive, or the belief that one’s assets or income are sufficient to cover potential losses, leaving themselves and their loved ones vulnerable to financial distress in the event of unexpected events such as illness, injury, or death. With the right insurance in place, individuals can ensure financial security and peace of mind, particularly for those with dependents or significant debts.

Types of Personal Risk Insurance

When thinking about insurance, it is important to understand the different types of personal risk insurance available. Each type serves a specific purpose and covers different risks, helping individuals manage various uncertainties in life.

  1. Life Insurance

Life insurance offers a lump sum payment to cover expenses like funeral costs, debts, and ongoing financial needs in the event of death. This coverage ensures that families are financially supported after the loss of a loved one, especially for those with mortgages, children, or other responsibilities.

  1. Total and Permanent Disability (TPD) Insurance

TPD insurance provides financial protection if one becomes totally and permanently disabled, preventing them from working. This coverage helps maintain living standards by covering medical, rehabilitation, and everyday expenses, and is valuable for those with high-risk jobs or substantial financial obligations.

  1. Income Protection (IP) Insurance

IP insurance replaces a portion of regular income—typically up to 75%—if the policyholder is temporarily unable to work due to illness or injury. It is crucial for anyone with significant financial responsibilities, ensuring that bills and loans are paid while they recover.

  1. Trauma Insurance

Trauma insurance, sometimes referred to as critical illness insurance, is the most expensive form of personal risk insurance. It is designed to provide a lump sum payment if diagnosed with a serious illness such as cancer, heart attack, or stroke. The purpose of trauma insurance is to help cover the costs of treatment, rehabilitation, and recovery, as well as other financial burdens that may arise, such as time off work. Trauma insurance can be an essential part of a comprehensive risk management plan, especially for individuals with a family history of serious medical conditions.

When Should You Consider Insurance?

Understanding when to consider insurance is key to making informed decisions about coverage. Several life scenarios can signal the need for personal risk insurance.

  1. Debt

Insurance is essential for those with significant debt, such as a mortgage or personal loans. Life insurance ensures that loved ones are not left with overwhelming financial obligations, while IP and trauma insurance will help cover loan repayments if the policyholder is unable to work temporarily.

  1. Financial Dependents

One of the most important reasons to consider insurance is having financial dependents—individuals who rely on a person’s income for their day-to-day living expenses. This could include a spouse, children, or aging parents. In such cases, life insurance is crucial as it provides financial security to loved ones after the policyholder’s passing.

  1. One Priority Income Earner

In many households, there is a priority income earner, meaning one individual contributes significantly more to the household’s income than others. When this is the case, insurance becomes a top priority. If the primary income earner becomes unable to work due to illness, injury, or death, the family’s financial stability can be severely impacted. Life insurance provides support for dependents in the event of death, while Income Protection (IP) and Total and Permanent Disability (TPD) insurance protect the income stream if the main earner can no longer work. Trauma insurance also offers financial support during critical illnesses, helping the family manage expenses during challenging times.

Rising Premiums: Exploring Alternatives to Traditional Insurance

As individuals age or their health changes, insurance premiums can rise, making it more challenging to maintain coverage. For many, these rising premiums prompt a reconsideration of insurance options, introducing the concept of self-insuring as an alternative.

Self-insuring involves using personal assets to cover potential risks rather than relying on insurance. For instance, individuals with a strong asset base—such as savings, investments, or property—may choose to self-insure by using these resources to cover medical expenses, debts, or living costs in the event of illness, injury, or death.

Before deciding to self-insure, it is important to carefully assess the financial situation and determine whether existing assets are sufficient to cover the potential costs of unforeseen events. Consulting with a financial adviser can help in weighing the pros and cons of continuing with insurance versus opting to self-insure.

Mature-Age Children: Is It Time to Reassess Your Insurance Needs?

As children grow older and become financially independent, their parents’ insurance needs may change. If mature-age children no longer rely on parental income for support, the need for life insurance may decrease. This situation presents an opportunity to reassess the overall financial situation, consider the asset base, and explore the possibility of self-insuring. Consulting with a financial adviser can assist in determining whether it is time to reduce insurance coverage or transition to relying on personal assets to cover future risks.

Considering insurance is essential at various stages of life, particularly for those with financial dependents, significant debts, or a priority income earner in the household. By understanding the different types of personal risk insurance available—such as life, Total and Permanent Disability (TPD), Income Protection (IP), and trauma insurance—individuals can better protect themselves and their loved ones from financial hardship in the event of illness, injury, or death. As premiums rise and family situations change, self-insuring may become a viable alternative to traditional insurance. A financial adviser can provide guidance through these decisions, helping to ensure a secure financial future and protection for loved ones.

 

Key Dates – November 2024

21 November

Lodge and pay October 2024 monthly business activity statement.

25 November

Lodge and pay quarter 1, 2024–25 activity statement if you lodge electronically.

28 November

Lodge and pay quarter 1, 2024–25 Superannuation guarantee charge statement if the employer did not pay enough contributions on time.

Note: Employers lodging a Superannuation guarantee charge statement can choose to offset contributions they paid late to a fund against their super guarantee charge for the quarter. They still have to pay the remaining super guarantee charge.

The Tax Fraud Scam- PLEASE READ

 

You login to your myGov account to find that your activity statements for the last 12 months have been amended and GST credits of $100k issued. But it wasn’t you. And you certainly didn’t get a $100k refund in your bank account. What happens now?

In what is rapidly becoming the most common tax scam, myGov accounts are being accessed for their rich source of personal data, bank accounts changed, and personal data used to generate up to hundreds of thousands in fraudulent refunds. For all intents and purposes, it is you, or at least that’s what it seems. And, the worst part is, you probably gave the scammers access to your account.

But it’s not just activity statements. Any myGov linked service that has the capacity to issue refunds or payments is being targeted. Scammers are using the amendment periods available in the tax law to adjust existing data and trigger refunds on personal income tax, goods and services tax (GST), and through variations to pay as you go (PAYG) instalments. In some cases, the level of sophistication and knowledge of how Australia’s tax and social security system operates is next level.

Once the scammers have access to your myGov account, there is a lot of damage they can do.

So, how does this happen and why is it so pervasive? Humans are often the weakest link.

Common scams utilise emails (78.9% of reported tax related scams in the last 12 months) or SMS (18.4% of reported scams) that mimic communication you might normally expect to see. The lines of attack used by tax related scammers are commonly:

Fake warnings about attempted attacks on your account (and requiring you to click on the link and confirm your details);

Opportunistic baiting where some form of reward is flagged, like a tax refund, that you need to click on the link to confirm and access; and

Mimicking common administrative notifications from the Australian Taxation Office (ATO) like a new message accessible from a link.

Approximately 75% of all email scams reported to the ATO to March 2024 were linked to a fake myGov sign in page.

How to spot a fake

Often the first sign that something is amiss is alerts about activity on your myGov account or a change in details – which might seem a little ironic if the way in which scammers got into your account in the first place is via these very same messages. But, there are ways to spot a fake:

The ATO, Centrelink and MyGov don’t use hyperlinks in messages. If you receive a message with a link, it’s a fake.

The ATO will not use QR codes as a method for you to access your account.

The ATO will never ask for your tax file number (TFN), bank account details or your myGov login details over social media. Some scammers have used fake social media accounts mimicking the ATO and other Government agencies. When a query comes in, they respond by asking for information to verify it’s you. The ATO will never slide into your DMs. ATO Assistant Commissioner Tim Loh said, “it’s like giving your house keys to a stranger and watching them change your locks.”

The ATO do not use pre-recorded messages to alert you to outstanding tax debt. The ATO will not cancel your TFN. Some scammers suggest that your TFN has been cancelled or suspended due to criminal activity or money laundering and then tell you to either pay a fee to correct it, or transfer your money to a ‘safe’ bank account to protect you against your corrupted TFN.

The ATO will not initiate a conference call between you and your tax agent and someone from a law enforcement agency. In one case, the taxpayer was told that the caller was from the ATO and a person from her accounting firm was on the call as well to represent her and work through a problem. The ATO caller and the tax agent were fake. Just hang up and call our office if you are ever concerned. The ATO will never initiate a conference call of this type.

The ATO will also not ask you to reconfirm your details because of security updates to myGov. The link, when activated, takes you to a fake myGov web page that can look very convincing.

In general, you should always log into your myGov account directly to check on any details alerted in messages rather than clicking on links. This way, you know that you are not being redirected to somewhere you should not be.

And, don’t log into your myGov account on free WIFI networks. Ever.

30 NOVEMBER DIRECTOR ID DEADLINE- EXTENDED

The deadline for existing directors of Australian companies to obtain a Director Identification Number is 30 November 2022. As of Today, ASIC have announced an extension date to 14 December 2022.

All directors of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation (ATSI) will need a director ID. This includes directors of a corporate trustee of a self-managed super fund (SMSF).

A director ID is a 15 digit identification number that, once issued, will remain with that director for life regardless of whether they stop being a director, change companies, change their name, or move overseas.

For those who have been a director since 31 October 2021, the deadline for obtaining a director ID is 30 November 2022 unless you are a director of an Aboriginal and Torres Strait Islander corporation, then the deadline is 30 November 2023.

For overseas directors, the process to obtain a director ID can be onerous as applications cannot be made online. In addition to the paper application form, you will need copies of one primary and one secondary identity document (or primary identity documents) certified by notaries public or at an Australian embassy.

For those who have been invited to become a director but are not a director as yet, if you do not have a director ID, you will need to obtain one prior to being appointed.

You do not need a director ID if you are running a business as a sole trader or partnership, or you are a director in your job title but have not been appointed as a director under the Corporations Act or Corporations (Aboriginal and Torres Strait Islander) Act (CATSI).

BUSINESS & EMPLOYERS

Removed Self-assessment of intangible assets

Announced in the 2021-22 Budget and due to commence on 1 July 2023, the measure enabling taxpayers to self-assess the effective life of certain intangible assets, rather than being required to use the effective life currently prescribed by statute, has been removed.

The measure was to apply to assets acquired from 1 July 2023 including patents, registered designs, copyrights and in-house software.

Dramatic jump in penalties for competition and consumer law breaches

From 2022-23 financial year

From the 2022-23 year, the penalties for a corporation breaching competition and consumer laws will increase sharply from a maximum of $10m to a maximum of $50m per breach, and from 10% of annual turnover to 30% of turnover (whichever is greater) during the period the breach took place.

Energy efficiency grants for SMEs

From 2022-23 financial year

The Government will provide $62.6m over 3 years from 2022-23 to help small and medium business fund energy efficient equipment upgrades. The funding will support studies, planning, equipment and facility upgrade projects that will improve energy efficiency, reduce emissions or improve the management of power demand. No details of the grants are currently available.

Delayed Ridesharing reporting requirements

In the 2019-20 Mid Year Economic and Fiscal Outlook (MYEFO), new reporting measures were announced requiring sharing economy online platforms to report identification and income information on participating sellers to the ATO for data matching purposes. These measures have now been delayed from:

· 1 July 2022 to 1 July 2023 for transactions relating to the supply of ride sourcing and short-term
accommodation, and

· 1 July 2023 to 1 July 2024 for all other reportable transactions (including but not limited to asset sharing,
food delivery and tasking-based services).

Thin cap rules introduce earnings based test

From 1 July 2023

The thin capitalisation rules, which can potentially limit the amount that can be claimed for debt deductions such as interest, will be amended. The Government will replace the current safe harbour and worldwide gearing tests with earnings-based tests to limit debt deductions in line with an entity’s profits.

Applying to multinational entities operating in Australia and any inward or outward investor, in line with the existing thin capitalisation regime, the measures will:

· Limit an entity’s debt-related deductions to 30 per cent of profits (using EBITDA as the measure of
profit). This new earnings-based test will replace the safe harbour test.

· Allow deductions denied under the entity-level EBITDA test (interest expense amounts exceeding the
3% EBITDA ratio) to be carried forward and claimed in a subsequent income year (up to 15 years).

· Allow an entity in a group to claim debt-related deductions up to the level of the worldwide group’s net
interest expense as a share of earnings (which may exceed the 30% EBITDA ratio). This new earnings-
based group ratio will replace the worldwide gearing ratio.

· Retain an arm’s length debt test as a substitute test which will apply only to an entity’s external (third
party) debt, disallowing deductions for related party debt under this test.

Financial entities will continue to be subject to the existing thin capitalisation rules.

The current thin capitalisation regime limits debt deductions up to the maximum of three different tests:

· A safe harbour (debt to asset ratio) test;

· An arm’s length debt test; and

· A worldwide gearing (debt to equity ratio) test.

Companies to declare their subsidiaries

From 1 July 2023

New reporting requirements from 1 July 2023 will require:

· Australian public companies (listed and unlisted) to disclose information on the number of subsidiaries
and their country of tax domicile;

· Tenderers for Australian Government contracts worth more than $200,000 to disclose their country of tax
domicile (by supplying their ultimate head entity’s country of tax residence); and

· Large multinationals, defined as significant global entities, to prepare for public release of certain tax
information on a country by country (CbC) basis and a statement on their approach to taxation, for
disclosure by the ATO.

Global entities denied deductions for intangibles

From Payment made on or after 1 July 2023

Significant global entities (at least $1bn global revenue) will no longer be able to claim a tax deduction for payments made, directly or indirectly, to related parties for intangibles held in low or no tax jurisdictions. This could include royalties paid for the use of trademarks and other intellectual property items.

A low or no tax jurisdiction is one with:

· A tax rate of less than 15%, or

· A tax preferential patent box regime without significant substance.

The measure is anticipated to apply to payments made on or after 1 July 2023.

This measure could impact on Australian entities that are subsidiaries of a foreign parent entity where the global revenue of the consolidated group for accounting purposes is $1bn or more.

GOVERNMENT & REGULATORS, OTHER AND THE ECONOMY

ATO targets in sharp focus

Personal income tax deductions and incorrect reporting

The ATO will receive an additional $80.3 to crackdown on non-compliance including:

· Overclaiming deductions; and

· Incorrect reporting of income

The spend is expected to increase tax receipts by $674.4m and payment by $80.3m over 4 years.

Cash payments and tax evasion by business

The ‘shadow economy’, cash-in-hand payments including underpayment of wages, visa fraud, and other nefarious activity that deprives the economy of the income from tax receipts, will come under scrutiny with the extension of the ATO’s Shadow Economy Program for a further 3 years from 1 July 2023. Over this period, the program is estimated to increase tax receipts by $2.1bn and payments by $685.2m over the 4 years from 2022-23.

Multinational business and the Tax Avoidance Taskforce

The ATO’s Tax Avoidance Taskforce will receive an additional $200m over 4 years from 1 July 2022 primarily to pursue multinational enterprises and large public and private businesses. This taskforce is expected to deliver a whopping $2.8bn in additional tax receipts and $1.1bn in payments over the 4 year period.

$3.6bn cut from external labour, advertising, travel and legal expenses

The Government has committed to saving $3.6bn by cutting what it spends on external labour, advertising, travel and legal expenses.

Other

Working with our Pacific Neighbours

Australia’s relationship in the Pacific has come into sharp focus of late. The Budget implements a series of initiatives to support development and labour mobility in the region:

· Additional infrastructure investment of $500m over 10 years in the Pacific and Timor-Leste will be provided through the Australian Infrastructure Financing Facility for the Pacific including an additional $50m for the establishment of a Pacific Climate Infrastructure Financing Partnership Facility.

· As previously announced, the Pacific Australia Labour Mobility scheme will be expanded to improve the benefits of the program for employers and workers including:

o underwriting employers’ investment in upfront travel costs for seasonal workers by covering costs that cannot be recouped from workers

o improvements to workplace standards for PALM visa holders, including increased workplace compliance activities

o allowing primary visa holders on long-term placements to bring partners and children to Australia, where sponsored by employers, with additional
social support including providing relevant minimum family assistance payments, with an initial rollout of 200 families

o the expansion of the existing aged care skills pilot programs for aged care workers.

· A new Pacific Engagement Visa for nationals of Pacific Island countries and Timor-Leste. Up to 3,000 additional places will be made available in addition to those provided through the existing permanent Migration Program.

Electric vehicle and hydrogen refuelling

As part of its Driving the Nation Fund, the Government will commit:

· $146.1m over 5 years from 2023-24 for the Australian Renewable Energy Agency to co-invest in projects to reduce emissions from Australia’s road transport sector

· $89.5m over 6 years from 2022-23 for the Hydrogen Highways initiative to fund the creation of hydrogen refuelling stations on Australia’s busiest freight routes, in partnership with states and territories, including $5.5m to LINE Hydrogen Pty Ltd for its George Town green hydrogen heavy transport project

· $39.8m over 5 years from 2022-23 to establish a National Electric Vehicle Charging Network to deliver 117 fast charging stations on highways across Australia, in partnership with the NRMA.

Broadband & mobile improvements for regional Australia

Almost $758m will be spent improving mobile and broadband connectivity in rural and regional Australia.

Foreign investment review board fees increase

The Government has increased foreign investment fees and will increase financial penalties for breaches that relate to residential land. Fees doubled on 29 July 2022 for all applications made under the foreign investment framework. The maximum financial penalties that can be applied for breaches in relation to residential land will also double on 1 January 2023.

Community sector organisations funding boost

An additional $560m over 4 years will be provided to community sector organisations ($140m pa). 46% of the funding will come from the Department of Social Services and around 34% to the National Indigenous Australians Agency.

Extension of Tariffs on Russian goods

The Government has extended the temporary additional tariff on goods imported from Russia and Belarus until 24 October 2023. The additional 35% tariff applies to goods that are the produce or manufacture of Russia and Belarus shipped to Australia on or after 25 April 2022.

Note that Ukrainian goods have previously been exempted from import duty for 12 months until 4 July 2022.

Infrastructure projects

The Budget has reallocated infrastructure projects, “reprofiling” $6.5bn in funding for existing projects. An additional $8.1bn over the next 10 years has been earmarked for priority projects including:

ACT

· $85.9m for the Canberra Light Rail Stage 2A project

New South Wales

· $1.4bn including $500m for planning, corridor acquisition and early works for the Sydney to Newcastle High Speed Rail, $268.8m for the New England Highway – Muswellbrook Bypass and $110m for the Epping Bridge

Northern Territory

· $550m including $350m to seal the Tanami Road and Central Arnhem Road

Queensland

· $2.1bn including $866.4m for the Bruce Highway, $400.0m for the Inland Freight Route (Mungindi to Charters Towers) upgrades, $400.0m for Beef Corridors and $210.0m for the Kuranda Range Road upgrade

South Australia

· $460m including $400m for the South Australian component of the Freight Highway Upgrade Program.

Tasmania

· $78m for projects in Tasmania, including $48.0 million for the Tasmanian Roads Package

Victoria

· $2.6bn including $2.2bn for the Suburban Rail Loop East

Western Australia

· $634.8m including $400.0 million for the Alice Springs to Halls Creek Corridor upgrade and $125m for electric bus charging infrastructure in Perth

National

· $18m to establish the High Speed Rail Authority to plan, develop, coordinate, oversee and monitor the construction and operation of the high speed rail network.

The economy

The Government appear keenly aware of the economic balancing act taking place, keeping the budget predominantly to election promises and redirecting existing initiatives to avoid exacerbating inflationary pressures. As the Treasurer said “Australians know this is a time of great challenge and change.”

The global economic environment has sharply deteriorated. Inflation has risen rapidly across advanced economies. The Russian invasion of Ukraine has significantly driven up global energy costs and exacerbated the impact of poor weather on global food prices. All of this impacts on Australia. Here are the highlights:

GDP – Real GDP is forecast to grow by 3¼ per cent in 2022-23 before slowing to 1½ per cent in 2023-24, as cost of living pressures and rising interest rates increasingly weigh on household disposable income and consumption.

The Government warn that with the highly uncertain global economic outlook, there are significant risks that could cause a sharper slowdown in domestic activity. Globally, key risks include a ‘hard landing’ or recession across major advanced economies, a sharper-than-expected downturn in China due to COVID-19 outbreaks and the property market downturn, a sudden tightening in financial market conditions and further energy price shocks stemming from the Russian invasion of Ukraine, which could drive inflation even higher.

And domestically, the full impact of recent floods is highly uncertain as the situation continues to develop.

Inflation – forecast to peak at 7¾ per cent in the December quarter of 2022. Supply disruptions have resulted in large price increases in home building, fuel and energy. Food prices remain elevated and have been further exacerbated by recent floods. Some of these pressures are expected to persist into 2023. Inflation is expected to remain elevated at 5¾ per cent over 2022-23 and 3½ per cent over 2023–24 before gradually easing and returning to within the Reserve Bank’s inflation target by 2024-25.

Deficit – lower the originally estimated at $36.9bn. However, the deficit is expected to climb to over $51bn by 2024-25 with the impact of higher inflation on indexed payments for services, the NDIS in particular.

Gross debt – is close to one trillion dollars and is at the highest level as a share of GDP in over 70 years.

Tax receipts – revised up by $54.4bn in 2022-23 and $142.0 billion over the 4 years to 2025-26.

Unemployment and wages growth – labour market conditions are expected to remain tight. The unemployment rate is forecast to rise to 4½ per cent by the June quarter of 2024.

Tight labour market conditions are expected to see annual wage growth pick up to 3¾ per cent by June 2023. However, high inflation is expected to see real wages fall over 2022-23 before rising slightly over 2023-24.

Energy – Electricity and gas prices are expected to rise sharply over the next 2 years, as the cost of energy market disruptions are passed through to households. Treasury has assumed retail electricity prices will increase by an average of 20% nationally in late 2022. Retail electricity prices are expected to rise by a further 30% in 2023-24.

Domestic gas prices remain more than double their average prior to Russia’s invasion of Ukraine. Retail prices are expected to increase by up to 20% in 2022-23 and 2023-24.

Are you suddenly receiving monthly instalment activity statements (IAS)?

We have noticed this month that the ATO has started sending out monthly IAS’s to clients who previously did not receive them.

You may have had your PAYG tax withholding (for wages) obligations included in the quarterly BAS for your business, however if you have gone over the ATOs annual PAYG Tax withholding threshold, you will now be paying the obligations monthly.

What does this mean?

Towards the end of each month, you will now receive an IAS where you report the total PAYG tax withheld for that month, you will also need to lodge the IAS and pay the obligation by its due date (usually the month after).

You will still be required to complete and lodge a quarterly BAS’, however your PAYG withholding for 1 month (the last month of that quarter) will be included in the BAS.

For example:

Quarter 1= 1 July – 30 September

An IAS will be sent for July & August months.

BAS will still be received for the quarter (towards the end of September)however the PAYG withholding obligation will be included only for September, therefore maintaining the monthly reporting of PAYG tax withholding. The rest of the BAS information will be for the quarter (GST received & paid).

If you have received an IAS and you are not certain how to complete it or would like to discuss it further, please feel free to contact our office. We are here to clarify things for you.